STMicroelectronics (NYSE:STM) Announces Earnings Results, Beats Estimates By $0.05 EPS

STMicroelectronics (NYSE:STM) released its earnings results on Thursday. The semiconductor producer reported $0.31 EPS for the quarter, beating the consensus estimate of $0.26 by $0.05, Zacks reports. STMicroelectronics had a net margin of 3.56% and a return on equity of 4.29%. The firm had revenue of $3.49 billion for the quarter, compared to analysts’ expectations of $3.46 billion.

Here are the key takeaways from STMicroelectronics’ conference call:

• ST reported Q2 revenue of $3.49 billion, above the midpoint of guidance, with strong demand across automotive, industrial, and communications-related markets. Management said bookings were robust and book-to-bill was close to 2 overall, signaling improved visibility.
• AI data center exposure is becoming a larger growth driver: ST raised its 2026 data center revenue target to above $1 billion and now sees it well above $2 billion in 2027, driven mainly by optical connectivity and silicon photonics. Management also said this business should be accretive to gross margin over time.
• Automotive and industrial both accelerated, with automotive revenue up 14% sequentially and industrial up 20% sequentially. The company highlighted design wins in ADAS, powertrain, sensors, industrial automation, and power systems.
• Q3 guidance points to $3.7 billion in revenue at the midpoint and gross margin of about 37%, with management expecting further gross margin improvement in Q4. However, they warned that manufacturing reshaping costs and underloading charges will continue to weigh on margins.
• Cash generation improved, with positive free cash flow of $75 million in Q2, inventory days falling to 126, and the net financial position remaining solid at $2.01 billion. Management also said it expects 2026 net capex at the high end of the $2.0 billion-$2.2 billion range to support growth investments.

STMicroelectronics Price Performance

Shares of NYSE:STM opened at $51.39 on Friday. The company has a market capitalization of $46.16 billion, a PE ratio of 100.76 and a beta of 1.93. The company has a debt-to-equity ratio of 0.12, a quick ratio of 2.34 and a current ratio of 3.31. The stock has a fifty day moving average of $70.12 and a 200-day moving average of $48.44. STMicroelectronics has a one year low of $21.11 and a one year high of $81.42.

Hedge Funds Weigh In On STMicroelectronics

Several institutional investors and hedge funds have recently added to or reduced their stakes in STM. Amundi purchased a new position in shares of STMicroelectronics during the first quarter valued at $947,000. AQR Capital Management LLC lifted its stake in STMicroelectronics by 182.8% in the 1st quarter. AQR Capital Management LLC now owns 32,094 shares of the semiconductor producer’s stock worth $705,000 after acquiring an additional 20,745 shares in the last quarter. Legal & General Group Plc acquired a new stake in STMicroelectronics during the 2nd quarter worth about $119,000. M&T Bank Corp acquired a new stake in STMicroelectronics during the 2nd quarter worth about $303,000. Finally, EverSource Wealth Advisors LLC grew its stake in STMicroelectronics by 79.1% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 4,883 shares of the semiconductor producer’s stock valued at $148,000 after acquiring an additional 2,156 shares in the last quarter. 5.05% of the stock is currently owned by hedge funds and other institutional investors.

STMicroelectronics News Summary

Here are the key news stories impacting STMicroelectronics this week:

• Positive Sentiment: STMicroelectronics reported Q2 revenue of $3.49 billion and EPS of $0.31, both above analyst estimates, with results supported by stronger AI data-center and industrial demand. STMicroelectronics (STM) Q2 2026 Earnings Call Transcript
• Positive Sentiment: Management raised its AI data-center revenue ambitions, saying demand, backlog, and product mix are improving and pointing to higher revenue expectations for 2026 and 2027. SpaceX Supplier STMicroelectronics Hikes AI Data-Center Sales Goal Again
• Neutral Sentiment: Market commentary suggests investors are still weighing long-term AI upside against near-term execution issues and a recent pullback in the shares. STMicroelectronics (ENXTPA:STMPA) Stock May Be Below Fair Value On AI Revenue Ambitions
• Negative Sentiment: The company’s Q3 revenue guidance midpoint came in slightly below market expectations, fueling concerns that near-term growth may not match the enthusiasm around AI spending. STMicro’s Q3 revenue view slightly lags estimates even as chip demand recovers
• Negative Sentiment: Several reports noted that shares fell after the earnings release as investors focused on the softer outlook rather than the quarterly beat, with doubts also emerging about the durability of the AI spending boom. STMicroelectronics hit by doubts over AI spending boom

Wall Street Analysts Forecast Growth

Several research firms have recently issued reports on STM. Morgan Stanley reiterated an “overweight” rating on shares of STMicroelectronics in a report on Tuesday, June 30th. Mizuho cut their target price on STMicroelectronics from $84.00 to $80.00 and set an “outperform” rating for the company in a research report on Friday. Barclays set a $60.00 price target on STMicroelectronics in a research note on Friday. Citigroup reissued a “buy” rating on shares of STMicroelectronics in a research note on Sunday, April 26th. Finally, Susquehanna upped their price objective on STMicroelectronics from $60.00 to $75.00 and gave the company a “positive” rating in a report on Tuesday. One analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating and three have issued a Hold rating to the stock. According to MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and a consensus price target of $72.89.

About STMicroelectronics

STMicroelectronics is a global semiconductor company headquartered in Geneva, Switzerland, formed through the 1987 merger of SGS Microelettronica and Thomson Semiconducteurs. The company designs, develops and manufactures a broad range of semiconductor products and solutions that serve multiple end markets worldwide. ST’s offerings span from basic components to integrated systems, emphasizing energy-efficient and high-performance devices for modern electronics.

Product categories include microcontrollers (notably the widely used STM32 family), analog and mixed-signal ICs, power MOSFETs and power-management devices, MEMS and sensors, image sensors, and discrete semiconductors.